I graduated in 2004 and have student loans of approximately $66,000. I consolidated my loans with American Education Services (AES) and I have one payment on two loans (subsidized and unsubsidized). I currently pay 3.5% fixed interest. My loan payment used to be about $265, however, it has recently increased to $340. I’ve been paying on and off since 2004 and it seems that my balance has just gone higher, due to accrued interest from the time to time I’ve had trouble paying and had to ask for a forbearance. President Obama just announced a law that would provide some relief for student loans.
Does this new Obama plan for student loan debt relief apply to me? I’ve read that it applies to Federal student loans, and although my loans were Federal loans at one point, I did consolidate with AES. I make a nice salary, however, I do have many bills and the thought of paying this student loan for another 25 years, just seems to be too much! I’ve paid thousands of dollars to this point and my balance has only increased since I originally left school. I mainly want to know if President Obama’s student debt relief applies to me and if it makes sense for me to have it apply to me?
As of right now there is no new Obama student loan plan in force yet. The talk is that something will hopefully be available in 2012. But now you do have the Income Based Repayment (IBR) Program which may be able to lower your payment.
I would imagine that any new student loan program is just going to stick with current government backed student loans but maybe we will be surprised when the details roll out. From what I’ve seen the options and solutions for private student loans are almost non-existent.
At this point I have no good news on this other than the IBR which private loans are not eligible for. Student loan debt has been a tragic problem for decades now and it’s all coming to a head now.
You can always call your loan servicer and talk to them about what options may be available for you. If you have any doubts about government program eligibility you can use the CFPB student debt repayment assistant tool to see what is available.
Please post your responses and follow-up messages to me on this in the comments section below.